Ten stations below CPB grants criteria

Published in Current July 9, 2012

At least 10 public television stations could be at risk of losing vital CPB community service grants this fiscal year and next because they have not raised the required minimum of $800,000 in nonfederal financial support.

Five stations didn’t meet that NFFS requirement in fiscal 2012, according to CPB; each is the sole provider of public television service in their market. CPB anticipates another five, possibly six, will not meet the NFFS minimum in FY13; updated financial reports are due Nov. 30.

CPB declined to identify the stations. At a CPB Board meeting June 4, Mark Erstling, CPB’s head of system development, said most “are in remote areas of Texas and California.”

Erstling said CPB is “in close communications with the stations’ boards and management,” and currently conducting detailed financial and management analyses.

“We will assist stations that come forward with plans that will put them on a strong financial footing,” Erstling said. “In many cases the path to sustainability is through some type of merger or consolidation.”

One smaller station got permission to do just that at the PBS Board meeting two weeks later, and is opting to partner up with its larger overlap station. On June 21 the PBS Station Services Committee approved the request of WLVT in Allentown, Pa., to move to PBS’s discounted Program Differentiation Plan (PDP) under an agreement with WHYY in Philadelphia, which nearly totally overlaps its signal. The two stations are working together, with WHYY agreeing to waive the usual PDP content-delay restrictions.

Other small stations may have a harder time finding partners to help preserve public TV service to their communities. One of the 10 stations at risk of losing its CSG is the only television provider, noncommercial or commercial, within a nearly 100-mile radius. A station executive there requested anonymity in speaking with Current because news of financial struggle could further erode local support. For a rural station, $800,000 “is a huge figure to make sure you have every year,” the station exec said.

Challenges in rural fundraising

CPB CSGs provide a financial lifeline for public TV outlets, especially for smaller stations. Each station receives a base grant within its CSG — for FY12, the amount was $482,142 — supplemented by an incentive grant that varies depending on the total amount of NFFS the station raises. In 1998, on the recommendation of a CSG review panel, CPB established $800,000 as the minimum NFFS needed to qualify for a CSG.

The most recent CSG review panel, convened nearly two years ago, recommended increasing the minimum to $1 million (Current, Sept. 20, 2010). The panel’s report noted that grantees with less than $1 million in NFFS depend on CSGs for an average of 47.5 percent of their revenues. Panelists disagreed about how to address this problem. Some felt that these stations were “highly susceptible to any downward trend in the CPB appropriation, potentially putting universal access at risk in some communities.” They needed an incentive to boost their fundraising programs. Three small-station executives on the panel dissented, arguing that an unintended consequence of a higher NFFS would be “diminishing local service to remote communities” served by licensees unable to meet the increase.

The CPB Board opted to table the proposed increase, and the $800,000 minimum was not changed. But the board compromised by adopting another policy recommendation, tightening up CPB’s automatic waiver policy. Previously, a station that fell below the minimum NFFS was eligible for a waiver if its auditor gives it a clean bill of financial health. Those waivers are no longer available.

In calculating a station’s NFFS for the next round of CSGs, CPB uses an average of station revenues earned in fiscal 2009, ’10 and ’11 — years when the national economy was in deep recession.

The pubcasting exec whose station fell below the NFFS minimum said it’s “very aggressive” in its fundraising, but the competition for charitable contributions is very steep in rural communities. Residents “donate to the university, to the hospital — so many others are vying for those dollars,” all from a base of far fewer people than an urban area. The exec says the station is in a much better position this year to hit the $800,000 figure.

“This station has made huge difference in lives of people in this region,” the source said.

Another endangered station is the sole pubTV provider through most of its service area, which encompasses 10 counties, and has been on the air for nearly 50 years. A manager there, who also requested anonymity, said this is the first time the station failed to meet the NFFS minimum. Regaining its CSG-qualified status by bolstering its fundraising “is now our priority and goal,” the manager said. “If we need to make adjustments we will, to accomplish that.”

This station fell below the NFFS minimum when it cancelled a well-established fundraising program to a new one that seemed promising, the manager said. But the new program fell through, dragging down the station’s three-year NFFS average.

At the June CPB Board meeting, Erstling noted that CPB’s involvement with the stations struggling to meet the NFFS requirement “is not about turning them off, but ensuring that the public still has that service.”